Service Properties Trust T.SVC

CIBC

[retiredcf]

Still keeping their modest target price (and Outperform rating) but hinting at much better things to come. GLTA

 

Sandvine Corporation

América Móvil Win Is Material For Sandvine

 SVC announced a tier-1 mobile service provider win that we believe to be América Móvil. This customer has 333 million users including 265 million wireless subscribers, making it SVC's largest potential customer. The initial order and deployments are for both policy control and business intelligence.

 Recall, América Móvil and Telefonica compete in most major Latin American markets including Brazil, Argentina and Mexico. Telefonica is a major Sandvine customer and has Q3 data revenues accounting for 48% of mobile sales in Argentina & Uruguay versus the low 40% range for América Móvil.

 The win could have been a result of América Móvil's desire to stay competitive with Telefonica. The $4 million initial order will be recorded in fiscal Q4. We are forecasting record sales of $30.3M (up 10% Y/Y, cons. $31M) in Q4 and this order obviously helps in attaining these levels of sales.

 Our price target remains at $3. We believe shares will move higher as the valuation discount to ALLT closes and SVC continues to put inconsistent results behind them. The stock continues to look attractive at the current level.